Tuesday, September 30, 2008

I know I am the only one on the planet to believe this. But I am sure it will happen. Windows Mobile will go open source, one day. It is the only smart move for Microsoft, in a market where nobody is going to make a dime (neither Google with Android, nor Nokia with Symbian).

Still, Microsoft signaled the exact opposite today ;-) They said they will stick with licensing Windows Mobile. The reasons from Ballmer?

"We do," Ballmer told Reuters, when asked whether his firm would stick with licensing fees. "We are doing well, we believe in the value of what we are doing."

Until Symbian and Android really go live and kick our ass (then we'll be open source as well ;-)

"It's interesting to ask why would Google or Nokia, Google in particular, why would they invest a lot of money and try to do a really good job if they make no money. I think most operators and telecom companies are skeptical about Google," he said.

I guess I heard this FUD before on open source. It might work for Android (maybe) but not with Symbian... They have no story around Symbian.

"Handset makers are skeptical of Nokia, operators are skeptical of Google, I think by actually charging money people know exactly what our motivations are," Ballmer said.

This is the best one, again one already heard on open source. Device manufacturers prefer to spend money than having something for free in a very competitive environment. Who knows what is in that open source operating system?? You cannot trust open source. Too bad, it does not work when you have giants like Nokia or Google behind it.

Believe me. Microsoft will make Windows Mobile open source one day. And they will stop charging for it. I am counting the days (and I will probably get too old to see this happening, so who cares? ;-)

There are many ways a world-wide community works together towards a common goal. One is sharing and improving code. Another one is testing and making sure it works on any phone and mobile operator in the world (mostly in the Funambol case, but it can be generalized). Another one is supporting all the users that belong to the community. There are more, but one stands out for simplicity: localization.

Localization is a killer. If you have a mass market consumer product and you are going after the entire world (which is flat, so you have to...), then you are facing the need of translating the UIs and web site and manuals in hundreds of languages. Granted, English works pretty much everywhere - if you are a developer. But if you are an end user, you want to see your language. No exceptions.

There is where the community kicks in. It is relatively easy - if you plan it properly - to have a community member in a country to do translations on the UI (not the funny one you see sometimes, really good ones), on the web site, on the manuals, instructions to use and configure phones and so on.

At Funambol, a big chunk of our downloads come from China. Actually, it is the #1 country for downloads. Mobile is exploding there. We are now about to have a presence in the region (we are expanding fast, first stop was the Middle East with Dubai), but we still rely on the community for making our product great.

One example is the new Funambol Forge in Chinese. I have absolutely no idea if the content was translated properly, but faith is what a community is built on. If you find anything wrong on the site, just join the translators and make it better. As simple as that.

There is a lot going on at Nokia. First, rumors came out that they are about to launch a device with a touchscreen (a phone, not a tablet). Yesterday, they came out with a press release saying they gave up on Intellisync (e.g. they are not selling a solution to the enterprise anymore). Today, the announced the acquisition of OZ, a mobile IM consumer company.

Where are they going?

Away from the enterprise software space, where they lost badly. They have never been an enterprise software company and they finally admitted it. The acquisition of Intellisync was a mistake (the price was half a billion...). They thought about moving Intellisync in the consumer space, but you can't change the DNA of a company...

Towards the consumer software space. They are feeling the pressure from Apple and Google, and seeing the huge opportunity in mobile consumer software. In particular, hosted by Nokia with the OVI brand. They know they can't compete on hardware alone, so they are moving towards mobile Software as a Service. OZ is another piece of the puzzle.

What does it mean for the market as a whole? Well, the big gorilla is on the move... First it was RIM offering HW+services, then Apple, now Nokia - even more aggressively. Google and Microsoft are the slight odd cases, offering services and the operating system, but not the HW. However, the direction is exactly the same. Mobile SaaS.

Who is getting squeezed? Mobile operators and service providers. Guys, the time to start launching services is NOW. If you can't buy a company, just partner with 0ne. You need to move. Fast.

Remember, families do not have just one phone. Most prosumers have two (one smartphone and one not). And all move from one brand to another (the phone is a fashion item). As Mikael wrote me today, if you have an iPhone and buy MobileMe, you can't buy anything else. You are stuck with the iPhone for the rest of your life, because they do not support any other device.

And there is life after the iPhone.

Consumers get it and they do not like to be trapped. Mobile operators and service providers are in a unique position. They own the consumer relationship. The cross-device capability is key. It is a huge opportunity and a necessary move to prevent being marginalized. If I were them, I would know where to put my 2009 budget ;-)

Monday, September 29, 2008

I was reading about the new T-Mobile DevPartner Program today. I felt it was a great step forward for a mobile operator. Allow developers to build applications for you, and you will get a lot of end users (and make the one you have happy), plus you'll make money by taking a cut of paid apps (and data usage).

Apple has showed the way. Mobile Operators are in a fantastic position to deliver cross-platform mobile apps, instead of leaving it all to device manufacturers or content providers (e.g. Google with is marketplace for Android).

Unfortunately, carriers still demonstrate they do not get it. Even if the concept is right, there is the "carrier twist" that screws up the good intention.

Example? Check what they say about FREE apps. That the developer that publishes a free app needs to pay T-Mobile ($2/user/month!!) if their users pass the 15MB/user/month threshold...

Now, what drives App Store usage? Free apps. People download first free apps, THEN they start paying. It is natural consumer behavior, more visible in the mobile world than elsewhere (since downloading apps is still a new thing).

Who develops free apps? Mostly non professional developers. Those that do it for fun. That build stupid apps. Those that get downloaded by millions of users... Even if they are stupid. But free. And drive the rest of the market.

Do you think non professional developers will be able to pay $2 per user per month to Tmobile??? I do not think so. What will they do? They will not post their apps.

There will not be free apps that use the network on T-Mobile. Developers won't be attracted by the Dev program. End user adoption will be limited. Game over. Failure guaranteed. Everyone on Apple App Store or Google Marketplace. Too bad.

Friday, September 26, 2008

This what happens when you have a community working with you. A guy from Google Mobile goes on TV with Scoble and says that Funambol is the best thing he has on the iPhone ("fantastic"). Then gives the best demo you can ever hope for... Nice way to complete a great day, after being beaten up by three funamboli on Mario for the Wii.

I was just ready to pause after the Android announcement, and the RIM debacle, that another news hit my Inbox: Nokia is ready to launch its iPhone/Android/BlackBerry/Windows Mobile killer (since they are at it, why not killing all them together?).

Apparently, next week Nokia will announce a touch-screen device. A departure from the E series, I believe, but still in the smartphone world.

Kinda late, but Nokia is not known to come up with products earlier than the competition. However, they are known to nail the competition once they enter a market. Let's see if they can pull it off this time as well.

For sure, the smartphone market is heating up badly. Mobile data is getting cheap. People are starting to ask for features "like the iPhone". Mobile 2.0 is here.

Thursday, September 25, 2008

With all these BlackBerry killers out there, somehow you had to believe RIM was going to suffer. Today they announced the results of the quarter (which looked pretty good to me, BTW) and a grim outlook, because they have to invest heavily to catch up with the competition.

The company is launching three major new models in the current quarter, and the cost of ramping up production will trim the company's gross profit margin, co-Chief Executive Jim Balsillie said.

The stock went down 20% in after hours. Ouch.

Well, it was to be expected. The iPhone can do pretty much what the BB can, although it does not have a keyboard (but it is so much cooler: "it is like jewelery" told me a friend yesterday). The G1 even has a keyboard. Not counting Windows Mobile, which is growing fast in the enterprise. Then there are thousands of smartphones about to be launched... All going for the existing BlackBerry market (tough fight) but, mostly, for the market RIM was hoping to expand into (consumers). On top of it, your core market (finance) is collapsing and your most faithful customers are seeing packing their stuff and shutting the doors behind.

The time of the smartphone is now. If you have to catch up on 3G, touchscreen, browsing, music, coolness, App Store and MobileMe... It gets hard. Funny how quickly the world changes.

I am a big fan of Larry Augustin (specially since he invested in Funambol :-) and his blog. He does not write often. He writes in bursts. We have been blessed that September is a good one, hoping to see the next bursts before the end of the year.

Anyway, his last post is titled "Commercial Open Source in Europe Versus the US" and it analyzes the difference of attitude towards open source, in Europe compared with the US. It is an awesome post. The table below is the summary of his analysis and it is hard to disagree on any of the points.

Concept/Idea

European View

United States View

Primary reason for adopting Open Source.

Avoid vendor lock-in.

Cost.

Key driver of commercial Open Source business creation.

Creation of a local software industry.

Venture capital/entrepreneur driven to create a big business and make money for investors.

Dual licensing business models.

Not true open source. Proprietary business models using Open Source for PR and marketing.

Widely accepted as the most common Open Source business model.

Software sales model.

Channel oriented: VARs and SIs.

Direct.

Open Source business models.

Service and support subscription focused; 100% open source software.

US companies don’t want to be in the services business. The focus is on products, typically proprietary add-ons or an Enterprise Edition paired with an Open Source product edition.

Expectations around "Open Source" products.

All code is available under Open Source. There is often a community governance of community participation model.

Same, but not necessarily all products are available under an Open Source license. Commercially licensed versions of the products are commonly available. Projects are managed by a commercial vendor.

Somehow, I found that Americans envy Europeans and viceversa. American are way more vocal about it. Europeans are not, actually they might tell you the opposite, but then underneath they would like to be Americans. I have the luxury to be both, so I can speak freely ;-)

Larry's conclusion is that Europe is ahead of the US because people understand the real value of open source. That is because he is an American... If you look at Commercial Open Source people from Europe, you might notice a slight difference: we all moved to the US. Marten of MySQL, Marc of JBoss, Haavard from Trolltech, Chris of DB4O, myself and many more. Why? Because here you can make a software company big. In Europe, you can't (or it is 10,000 times harder).

Larry is on the point:

Key driver of commercial Open Source business creation in Europe: creation of a local software industry. Good luck with that... Maybe in Paris, with government subsidy. We'll get to a Silicon Valley in Italy one day, but it will require US capital first. Building large companies without VCs in this flat world is nearly impossible.

Open Source business models in Europe: service and support, no dual licensing. Good luck with that... Not a chance you can build a large company with services. Again, there might be few exceptions, but without licensing you do not scale. You end up in a situation of hiring a new guy for every new customer, with the customer asking for the old guy (the one that knows the product) and the old guy about to leave the company for his new gig. NOTE: I used a male example, not because Europe is sexist... (Well, it is ;-)

Bottom line for me: Europe might be ahead in the quest of using open source, usually taking advantage of the communities built around it and government subsidies. But when it comes to building open source companies, there is no comparison. The US is the place to be. And dual licensing is the model to beat. Let a European who built companies on services tell you...

Wednesday, September 24, 2008

So... Tmobile releases the G1 Evil phone (compare it to the Jesus phone from Apple...). Everyone looks at it and thinks "ugly!" but it has one feature that attracts a subsegment (those that do not care about the looks): the keyboard. It has a keyboard! Not like the iPhone! So who is supposed to buy a phone that has a keyboard? People that do email: business people (yep, those that do not care about the looks, consumers do). The G1 is an attack to the BlackBerry market, some say... Not for consumers.

Wrong.

I tried to buy it last night. I called Tmobile and they told me: "sir, you need to login to your account and buy it online". Fine. I can use a browser. I went online, logged in with our Funambol account and there was no way to buy the G1 (I actually wanted two, because I like to show off). So I called back and they said: "strange, it should be there, sir".

Then I thought "mmmh, let me try again with my personal account" (yes, I DO have a personal account with Tmobile, incredible as it sounds). Bingo, the box to buy the G1 was there. So I thought "mmmh, maybe I did not look in the right place". I tried again with the Funambol account and it was not there. Being a geek, I copied the URL from the personal account and tried to go in with the business account.

The message: "Sorry, you can't buy the phone with this account".

So I called back and I asked Tmobile: "do you allow business accounts to buy G1 or is it only for consumers?".

The answer: "I am not sure, sir, let me check". Five minutes after: "yep, we do not sell it to business accounts, but do not worry because we have plenty for the launch on October 22nd: we are selling now only black and brown, holding back all the white ones for the 22nd".

The answer was apologetic. We had a laugh and now I do not have a G1 waiting for me. But I found out it is a consumer device, not a business device. With the wrong specs. And the wrong color. At least the operating system is open source...

Tuesday, September 23, 2008

A second big feature, or limitation, of the G1 - depending on your point of view - is that it is tightly tied to Google's web-based email, contacts and calendar programs. In fact, you must have a Google (GOOG) account to use the phone, and can only synchronize the phone's calendar and address book with Google online services. Unlike the iPhone, it doesn't work with Microsoft Exchange, and it can't physically be synced with a PC-based calendar or contacts program, like Microsoft Outlook.

So, if your world already revolves around Google services, you may find that the G1 fits like a glove. If not, you may be disappointed.

I guess we have got another strong point for MobileWe ;-) The rest of us might actually use something else than Google (horror, is anyone doing it??).

Nice presentation in New York today. The G1 is out. Ready to hit the market on Oct 22nd, just when everyone was saying Android was late ;-) Apparently, it is quite thin. From the pictures, it looks also quite ugly: I never liked the sliding keyboard, but who am I to complain about looks?

The cost is $179, it is locked to T-Mobile (surprise!), data plans are $25 with unlimited data and some messaging, $35 with unlimited data and messaging.

There is the Android Marketplace (that Sergey Brin called App Store during the show, ooopssie), no Skype, no tethering, can read Word, Excel and PDF (what about PowerPoint?) and it has a Chrome Lite browser, plus Google Maps with Street View (which is very cool). Music is via Amazon MP3. It runs on HDSPA, superfast, if only we had it in the US... Obviously, it has wifi and a camera.

For my world:

it does NOT have a cable or a desktop application for syncing (welcome to the new millennium, bye bye iTunes!)

it does NOT have Exchange compatibility (no ActiveSync)

it does have push email with Gmail (but no news about the rumor that it would be free and you would not need a data plan for it). Just wondering to see how open that would be for other email servers and PIM backends...

Overall, solid launch. The device is not that good looking but the price is right ($179 vs. $199 of the iPhone), the data plans are slightly cheaper than the iPhone ones ($25 vs. $30) and it is full of features.

I'll put an order in. This is the start of a new era. A mobile open source operating system is going mainstream. The world is changing fast.

Monday, September 22, 2008

The day has come. Tomorrow T-Mobile will show the world G1, the first Android phone. Not exactly the same buzz we have seen for the iPhone, but a milestone in the mobile world nonetheless.

Many rumors are filling the blogosphere. That they will have three colors: white, black and brown (brown? C'mon, the last gadget I saw in brown color is the Zune, with its international success...). That it will be built by HTC (on this one, I am ready to bet any sum). And many others, linked to the App Store and such.

The one I found more interesting - because of what I do for a living - is in an article by Fortune: apparently, T-Mobile is going to offer free email (Gmail, obviously) ad-sponsored. Free as in really free, even the data plan will be free. If this is the case, it is big news. Free email sponsored by advertising is something we have been pushing lately, but we were pretty much alone. If Google gets in the game with a carrier, then it is going to change the landscape pretty quickly.

I am not convinced the free data is going to make a big difference, though. People that buy an Android phone are going to have a data plan anyway. There is no reason to buy a smartphone that has Maps and browsing as the main features, and not have a data plan.

Still, the idea is intriguing and it will accelerate the push email market greatly. Show it to consumers and they will get excited pretty quickly. Yes, even in a recession. Wanna bet they are going to sell a lot of Android phones and very fast? People are cutting down on milk, but not on phones. Sad but true (and not really sad if you are in this market...).

Our marketing people are creative... We were looking for a word to describe the difference between Apple MobileMe and what Funambol does, and they came up with MobileWe. Actually, open MobileWe for the rest of us.

So:

it is like MobileMe, that is email, contacts, calendar and more data sync with push (oh, push is not in MobileMe...)

it is for the rest of us, the few billions that do not have an iPhone or do not want a @me.com account

it is open (as in open source) and not closed (as in you must have Apple all the way)

Hal put together a paper describing the idea, that you can request in our Product Library. Worth a look if you are a carrier or a device manufacturer or a service provider looking to offer value added services with huge growth potential.

Thursday, September 18, 2008

This week at OSiM 2008 in Berlin, I gave a talk about Mobile 2.0 and the role of mobile operators. It is a hot topic these days. Carriers have been totally marginalized by Apple on the iPhone: a device that could not be certified in their network, lacking most of the features they always requested, though they eventually certified it... They added MobileMe and the App Store. The carrier for Apple is just a pipe: a sales pipe, a data pipe. The same was true with RIM and the BlackBerry (and the comment was "it is a small market, not a big deal"). Now also Nokia is moving forward with OVI... And Google with Android and all their services and content. Not small markets anymore, a very BIG deal. The risk of being a (dumb) pipe is real and clear.

What can carriers do? Can they be still relevant? I believe so (despite the way I started my speech, but I was joking ;-)

However, they have to move FAST.

I suggested a few steps:

Be open, open the network, devices, services and content. Walled garden will collapse eventually, and they will collaps inward (that's in your face ;-)

Set up MobileMe & Appstore equivalents to get control back in services. T-Mobile is doing the App Store. Everyone should have a MobileMe solution (a.k.a. MobileWe, more in a separate post)

Get developers and provide APIs for third parties to hook into your networks to leverage customer relationships, billing, services. You own the customer, you own the relationship, you own the billing, you know the profile of the user (key for mobile advertising). You are in control, until you give it away for good... And controls means a lot of money.

Play greater role in helping users find relevant third party services and content (both mass market and long tail)

Reduce data plan pricing, which will increase demand for and usage of data-intensive services (increase ARPU)

Adopt open source methodologies and communities. There is no better model to innovate and keep up with the speed and diversity of this market.

Good luck to carriers. They have never been fast movers, but they have to move fast. I talked to a couple of mobile operators in Berlin and it seemed to me they got the message loud and clear. Therefore, I am optimistic (as usual).

Saturday, September 13, 2008

Last week I gave a keynote at the World Computer Congress, titled "A Successful Business Model for Open Source System". Many people asked me for the slides (apparently, open source people want to make money :-) and I put them on the SlideShare site. A day later, SlideShare sent me a note because they put my presentation on their home page (apparently, everyone wants to make money :-)). Here they are again.

Thursday, September 11, 2008

Lately, most of the people I meet tell me "you really do not like Apple...". I have to guess my latest posts about the iPhone being too close and MobileMe not working were too harsh. It is actually not my fault, the iPhone is really too close and MobileMe is really not working...

That aside, I do love Apple. My background is in usability. Anything that comes out from Cupertino is so usable and beautiful, I am astonished. From the packaging to the end product. I own plenty of iPods, one iPhone and a MacBook Air. My wife uses a Mac... I prove I love Apple with my credit cards...

The magic of Apple is to be able to show people what they do not know, going against the usual business practice of the focus groups. Forget it, says Steve Jobs, they can't tell you if they like something or not, if they have never seen it. Brilliant... I wish we could do the same for elections, getting rid of polls ;-)

I just finished a book about Steve's brain and I found quite fascinating to look behind the process. He is a maniac at making things work and make them easy. I share that passion. In his opinion, though, you have to control the entire process, from the beginning to the end, to make it happen. And you must not allow anyone in the middle to screw it up. That's why everything Apple is close by nature. It is hard to disagree, from the usability angle (and from they have been able to deliver...).

Interestingly, that is also why the Mac has few developers. Or why the iPhone is at risks to be obliterated by Android and the open source Symbian. Close might be good for usability, but becomes a burden for mass market usage. In particular, for multi-purpose devices. Those that can be enhanced, where developers can add the killer app, or just the one I really need. It is perfect for single-purpose devices, like a music player. And I am a fan of single-purpose devices: multi-purpose means making compromises on usability and quality. I never believed in convergence. Give me a good navigator I can leave in the car. I do not care about using my phone as a navigator in the car. It is a compromise and it delivers poor results.

It is strange. I am a lover of usability. I want things to be easy. But I want them to be open. I want creativity to blossom and I see every day the value of a community. And what it can do for you, building great and stable products.

It sounds like a tight-rope walk all over again ;-)

Can a community build usable products? Or is the focus too broad by definition, to force multi-purpose and screw up usability? I am not sure, but there must be a middle way. The trick is to find it. I can assure you I will keep trying...

Wed Sep 10 at 5:30 pm: panel in the Galleria Vittorio Emanuele in Milan (they are setting up a structure in the middle of it, called Ottagono). This one is in Italian and open to the public. The title is "Bamboccioni o Temerari". I do not even know where to start to translate the concept of Bamboccione, but if you are Italian... it should be a fun event.

Wed Sep 17 at 1:35 pm: at the Open Source in Mobile conference in Berlin (I could not miss this one, since I am on the advisory board ;-) The title is "Is Mobile 2.0 Making Carriers Redundant?". The answer is yes, so if you know that already, no reasons to show up ;-)

Fri Sep 19 at 10 am: at the AIFI 2008 Conference in Venice. The title is "The Italian style/the Italian skills". I am ready to bet it is going be fun as well...

That's it. See you around. When I am in Europe, Apple always comes up with something cool. I am betting on an unlimited iTunes package and a new Macbook for next Tuesday (with the always possible surprise of an iPhone mini... It is going to happen one day ;-)

Wednesday, September 03, 2008

I have been looking at the Google Chrome launch closely and I have been greatly impressed. Google put together a marketing machine of biblical proportion, spending some good dollars (for example, for the long comic book, which is geekly awesome) but mostly using all the tools of the new era. Blogs, Twitter, YouTube and the like (worth a reading for marketers of the new millennium). Unbelievably effective, if you are targeting geeks.

Who else has this ability? Apple. Nobody else does it. Or gets even close to it.

I looked at the product itself and I have to say it is quite impressive. For a geek. Speed, stability and security: that's all it has. Geeks love it. Geeks will use it. Geeks will build web sites and applications for it. Geeks will look at porn sites (sorry mom) thanks to the new Incognito tab (a browser mode that allows to watch sites without leaving any trace). Geeks will spread the word. Users will come. With no major reason but a big brand and a geek telling them to do it.

That's what Apple does. They appeal to geeks first. They spread the word, become Apple Geniuses and convert the masses. Geeks were the first buyers of iPods or iPhones. The masses came later.

Nobody else does it. Nobody else has real appeal on geeks or is able to talk to geeks. Microsoft can't, and they will see their world collapse pretty fast, if they do not move quickly in that direction (but looking at how they are approaching open source, I doubt it will ever happen).

I feel we are moving away from a Microsoft-centric world to one dominated by Google and Apple. The stocks have the exact same market cap today (Apple is ahead, just a bit) but they are catching up fast on MSFT. Both are unstoppable forces, Apple from the device hardware and software side (tying it with services), Google from the services side (tying it with device software). Apple is missing some services (and revenues from advertising). Google is missing some hardware (and they will get there sooner or later).

Where is mobile open source in all this? Well, anyone doubting that Chrome is going to look fairly similar on Android, making sure applications can be moved from the PC to the mobile device? Nobody. One of the keys for this move is exactly mobile: Google is building a platform to move applications on mobile devices and make money there (as well). And is this browser open source? Of course. It is all about mobile and open source... That's were the geeks are moving.

About Me

Fabrizio Capobianco is the Founder and CEO of TOK.tv, the company that lets you talk to your friends while watching TV. He also serves as President and Chairman of Funambol, which he founded in 2003 and grew to be the leading mobile open source company in the world.